Imagine being unable to access your checking account, your 401K, or, even worse, having your bank balance go to zero and, in the resulting chaos, being left with no way to prove the amount that should be in your account. After all, these days, all your sensitive banking data is stored in computer databases and, in the midst of a "cyber crisis," many (or all) recent transactions could be lost (or the banks could claim such). In such a scenario, the only real proof of funds would be whatever cash a consumer happened to have on hand.

Many analysts such as Gerald Celente and Max Kaiser have been warning people about keeping their money in banks. As America's financial situation continues to deteriorate, a false-flag cyber attack would be a clever way to disguise the inevitable and blame the collapse on something (or someone) else. Also, with the nation's financial data compromised and/or missing altogether, it would conveniently force a "reset" of the banking system back to zero.

In conclusion: A cyber attack that took out either the banking, or the power grid system would undoubtedly cause much turmoil. A cyber attack that took out both would be devastating. Either one would pave the road to martial law.

OUR RECOMMENDATION:

If you have money in a bank, consider getting it out. (Digital dollars are not durable, nor dependable!) Keeping enough cash as needed for survival is always wise, but consider putting all other assets into precious metals and/or necessary goods in order make the transition into the next new currency (whatever that might be). If you do not already have storable food, water and defensive weaponry, now would be a good time to acquire these items. Consider liquidating all paper assets including retirement accounts, stocks, bonds and mutual funds, since, at this point, it wouldn't take much to send the value of all these items to zero. Begin, if you have not already, to be more self-sustaining, whether through gardening, or bartering with other like-minded individuals, etc. Now is the time to introduce yourself to your neighbors before the power (and possibly other services) go out. Know who you can trust and who you can't.

THE SITUATION:

As the price of gold reaches new heights (over $1300 per ounce) and silver climbs to over $23 per ounce, the financial situation in America is dire, to say the least. Continuously rising rates of unemployment, increased government spending and the collapse of the real estate markets are all converging into one perfectly-directed/perfectly-designed collapse of, not only our economy, but the greater global economy as well. While major financial players such as Goldman Sachs and JP Morgan continue to have record profits, the middle class has disappeared from the American financial landscape. Major financial leaders such as Federal Reserve Chairman, Ben Bernanke, have openly admitted that our country's financial system is in deep trouble and even Europe is having more banker bailouts. Meanwhile, the American media constantly hypes a possible terror attack in America and other countries in Europe.

If another major terror attack such as 9/11 occurs, trends forecaster Gerald Celentehas stated that the event would bring the banking system to a complete halt, which would then result in a "bank holiday." And Celente is not alone. For over a year, many others have warned of an upcoming bank holiday. With our economy already in free fall, it would not take much of a national and/or worldwide terror event to completely crash our (fiat) dollar-based system in a very short period of time. Upon the crash of the dollar, more bank holidays could be declared and oppressive emergency banking powers could go into effect (see: Emergency Banking Act of 1933). These include severely limiting consumer withdrawals and a recall of physical gold holdings. Taking Presidential Defense Directive #51 into account (PDD-51), even a major stock-market crash could trigger this scenario. And once PDD-51 is invoked, then martial law could be fully implemented.

Another way the collapse of the banking system could lead to martial law is through cyber attacks.

This possibility has been particularly troubling to us, since, earlier this year, CNN aired a staged (i.e. fake) "cyber terror" attack complete with fake news reports being fielded by Michael Chertoff and other Washington insiders. Their premise was that the American power grid had been taken down by hacker/terrorists via cyber attack. Since the airing of that fake news program, alternative news agencies such as Infowars and others have made the point that such an attack is impossible for the average hacker, because the power grid is on a completely separate network from the Internet. In the meantime, threats against our power grid have been highlighted in other (suspect) ways, such as the Russians who were recently found trying to break into a Georgia power plant.

While the media continues to hype the threat of cyber terror against our power grid, others have looked into the perhaps more frightening prospect of a cyber attack on our banking system, which relies heavily upon computer networks as well as the Internet. Such an attack has already occurred both in America (over the July 4th holiday in 2009), as well as abroad (in South Korea, Estonia, India, and Canada). In fact, in February 2010, the American financial services industry actually participated in a cyber attack exercise to test the readiness of the financial system, so there's no way they can deny that they've actually considered the possibility of such an attack. If such an attack did occur, whole sections of the banking system would most likely go offline (as many believe happened to Bank of America earlier this year), or, worse, massive amounts of account data could be compromised, or lost altogether.

As with our first MARTIAL LAW ALERT, we have held back our assessment of the financial collapse currently underway until we could gather enough information. Since our focus is martial law, we always look at current events with an eye toward assessing the conditions that would be necessary for the President and/or the military to implement martial law. And, since we try to stay at least one step ahead of the game in order to warn people, such assessments must, of necessity, be speculative in nature. Nothing stated herein is guaranteed to happen. The purpose of these alerts is to get people thinking outside the mainstream-media box so that they might be better prepared to meet any eventuality (and this includes being prepared: mentally, emotionally, spiritually and physically -- and being prepared physically includes being prepared financially).

Scroll through the right-wing blogosphere, or listen in at a tea party rally, and you'll find angry people ranting about an out-of-control federal government that's redistributing the nation's wealth to the undeserving poor.

Those rants do have one point right: The federal government is shoveling hundreds of billions of dollars into programs that redistribute wealth. But these "wealth-building" programs aren't redistributing wealth from the top to the bottom. They're actually shifting more wealth to the top.

"We cannot avoid the sad irony," as one new report has just concluded, "that government policy aimed at building wealth is largely helping the rich get richer."

This new report from the Annie E. Casey Foundation and the Corporation for Enterprise Development--Upside Down: The $400 Billion Federal Asset-Building Budget--dives deep into the programs that aim to help Americans "buy homes, start businesses, put their children through college, and retire comfortably."

Upside Down's authors added up all the money the U.S. government devoted to these programs last year, and then tracked who exactly reaped the benefits. In nearly every instance, the answer came back the same. Federal dollars, as Upside Down details, routinely "subsidize wealth building for the wealthiest among us, rewarding them for (the) size of their homes and investment portfolios."

How could this be? Most federal asset-building programs, the study explains, deliver their benefits through the tax code, an approach that almost guarantees that the wealthy will score, by far, the biggest benefits.

Here's one example: The federal government encourages home-ownership--a central pillar of family wealth building--with tax deductions for mortgage interest and local property taxes as well as discount capital gains tax rates on the sale of property.

These sorts of tax subsidies work spectacularly well--if you have lots of income you can apply these tax breaks against. But if you don't have much money to report on your tax return, these tax breaks do you precious little good.

Low-income households that "don't make enough money to itemize deductions or even to accrue much tax liability," notes Upside Down, "receive next to nothing from these strategies."

And middle-income families don't see much benefit either. The typical household making $50,000 a year, the study relates, received in 2009 only $500 in benefits from the federal government's mortgage and property tax deductions and investment tax breaks. Taxpayers making over $1 million a year, on the other hand, averaged $95,820 last year from these same subsidies.

Over half the benefits from these programs went to the most affluent 5 percent of Americans: families making over $160,000. Just 4 percent went to the nation's bottom 60 percent: families that earned under $50,000 in 2009.

In other words, the near $400 billion the federal government is laying out, largely via tax subsidies, to help families "save, invest, and build assets" is doing remarkably little to help the families that really need the money.

Of course, alternatives do exist. We could, notes Upside Down, easily alter how we "deliver" asset-building assistance. We could, for instance, replace tax deductions with "refundable tax credits," a move that would funnel actual checks to Americans who don't have tax bills big enough to benefit from tax deductions.

And to end the windfalls for the wealthy our current system encourages, we could place "caps on the value of homes and other assets that can be deducted." That would mean no more tax breaks for mansions and palatial beach retreats.

We need to pursue all these alternatives, especially now, with so many millions of Americans facing foreclosure and finding jobs so few and far between. We don't need to start redistributing our nation's wealth. We're already redistributing. We just need to reverse the flow.

Sam Pizzigati edits Too Much, an online weekly on excess and inequality published by the Institute for Policy Studies. www.ips-dc.org

#10 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#11 In 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent.

#12 The television manufacturing industry began in the United States. So how many televisions are manufactured in the United States today? According to Princeton University economist Alan S. Blinder, the grand total is zero.

#13 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#14 Back in 1980, the United States imported approximately 37 percent of the oil that we use. Now we import nearly 60 percent of the oil that we use.

#15 The U.S. trade deficit is running about 40 or 50 billion dollars a month in 2010. That means that by the end of the year approximately half a trillion dollars (or more) will have left the United States for good.

#17 Today, the United States spends approximately $3.90 on Chinese goods for every $1 that China spends on goods from the United States.

#18 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.

Does anyone really want to hear that America is in decline? For decades, most of us have been raised to believe that the United States is "number one" and that anyone who doubts that fact is a "gloom and doomer" that should just pack up and move to "Russia" or "Iraq" or some other country where things are not nearly as good. But does it do us or future generations any good to ignore the very serious signs of trouble that are erupting all around us? The truth is that it is about time to wake up and admit how much trouble we are actually in. The U.S. government is absolutely drowning in debt. The entire society is absolutely drowning in debt. We are being slaughtered in the arena of world trade, and every single month tens of billions of dollars (along with large numbers of factories and jobs) leave our shores for good. Our infrastructure is failing, our kids are less educated and our incomes are going down. We have serious, serious problems. At one time, the U.S. economy was so dominant that it was not even worth talking about who was in second place. That is no longer the case in 2010. Our forefathers handed us the greatest economic machine in history and we have allowed it to fall apart right in front of our eyes. A national economic crisis of historic proportions is getting worse with each passing month, and yet most of our leaders seem to be asleep at the switch.

So is American in decline? Well, read the statistics below and decide for yourself. The reality is that when you start connecting the dots it gets really hard to deny what is going on.

Urgent action must be taken if things are going to be turned around. It is time to get our heads out of the sand. It is not guaranteed that the United States will always be the greatest economy in the world or that we will even continue to be prosperous.

For many Americans, it will be incredibly difficult to admit that our nation has become a debt addict and an economic punching bag for the rest of the world.

But if we are never willing to admit what the problems are, how are we ever going to come up with the solutions?

Please share these statistics with as many family members and friends as you can. It is time to get real. It is time to admit that we have some really big problems.

America is in decline and the situation is getting worse by the day. If we are not willing to admit how bad things really are, then we are never even going to have a chance to find the solutions that we need.

Not only is income and wealth in America more concentrated in fewer hands than it’s been in 80 years, but those hands are buying our democracy as never before – and they’re doing it behind closed doors.

Hundreds of millions of secret dollars are pouring into congressional and state races in this election cycle. The Koch brothers (whose personal fortunes grew by $5 billion last year) appear to be behind some of it, Karl Rove has rounded up other multi-millionaires to fund right-wing candidates, the U.S. Chamber of Commerce is funneling corporate dollars from around the world into congressional races,

and Rupert Murdoch is evidently spending heavily.

No one knows for sure where this flood of money is coming from because it’s all secret.

But you can safely assume its purpose is not to help America’s stranded middle class, working class, and poor. It’s to pad the nests of the rich, stop all reform, and deregulate big corporations and Wall Street – already more powerful than since the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators.

Credit the Supreme Court’s grotesque decision in Citizens United vs. the Federal Election Commission, which opened the floodgates. (Even though 8 of 9 members of the Court also held disclosure laws constitutional, the decision invited the creation of shadowy “nonprofits” that don’t have to reveal anything.)

According to FEC data, only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97 percent disclosed; in 2008, almost half disclosed.

Last week, when the Senate considered a bill to force such disclosure, every single Republican voted against it – thereby revealing the GOP’s true colors, and presumed benefactors. (To understand how far the GOP has come, nearly ten years ago campaign disclosure was supported by 48 of 54 Republican senators.)

Maybe the Disclose Bill can get passed in lame-duck session. Maybe the IRS will make sure Karl Rove’s and other supposed nonprofits aren’t sham political units. Maybe pigs will learn to fly.

In the meantime we face an election that marks an even sharper turn toward plutocratic capitalism than before – a government by and for the rich and big corporations — and away from democratic capitalism.

As income and wealth has moved to the top, so has political power. That’s why, for example, it’s been impossible to close the absurd tax loophole that allows hedge-fund and private-equity managers to treat much of their income as capital gains, subject to a 15 percent tax (even though they’re earning tens or hundreds of millions a year, and the top 15 hedge-fund managers earned an average of $1 billion last year). Why it proved impossible to fund expanded health care by limiting the tax deductions of the very rich. Why it’s so difficult even to extend George Bush’s tax cuts for the bottom 98 percent of Americans without also extending them for the top 2 percent – even though the top won’t spend the money and create jobs, but will blow a $36 billion hole in the federal budget next year.

The good news is average Americans are beginning to understand that when the rich secretly flood our democracy with money, the rest of us drown. Wall Street executives and top CEOs get bailed out while under-water homeowners and jobless workers sink.

A Quinnipiac poll earlier this year found overwhelming support for a millionaire tax.

But what the public wants means nothing if our democracy is secretly corrupted by big money.

Right now we’re headed for a perfect storm: An unprecedented concentration of income and wealth at the top, a record amount of secret money flooding our democracy, and a public in the aftershock of the Great Recession becoming increasingly angry and cynical about government. The three are obviously related.

We must act. We need a movement to take back our democracy. (If tea partiers were true to their principles, they’d join it.) As Martin Luther King once said, the greatest tragedy is “not the strident clamor of the bad people, but the appalling silence of the good people.”

What can you do?

1. Read Justice Steven’s dissent in the Citizens United case, so you’re fully informed about the majority’s pernicious illogic.

2. Use every opportunity to speak out against this decision, and embarrass and condemn the right-wing Justices who supported it.

3. In this and subsequent elections, back candidates for congress and president who vow to put Justices on the Court who will reverse it.

4. Demand that the IRS enforce the law and pull the plug on Karl Rove and other sham nonprofits.

5. If you have a Republican senator, insist that he or she support the Disclose Act. If they won’t, campaign against them.

6. Support public financing of elections.

7. Join an organization like Common Cause, that’s committed to doing all this and getting big money out of politics. (Personal note: I’m so outraged at what’s happening that I just became chairman of Common Cause.)

8. Send this post to your friends (including any tea partiers you may know).

http://robertreich.org/post/1263581986

Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including The Work of Nations, Locked in the Cabinet, and his most recent book, Supercapitalism. His "Marketplace" commentaries can be found on publicradio.com and iTunes.

Wednesday, October 13, 2010

This week we acknowledged our twenty-fifth day of homeschooling! It's been fun, challenging, and definitely one of the hardest couple of months in our lives, notwithstanding our choice to homeschool! Between my kidney, Kevin's infection in his arm, Lily's burn, Kevin being half around the world for more than two weeks, and the regular adjustment to the changing seasons, it has been an emotional and trying few weeks. They have also piggy-backed on to probably the best summer of our family-life) been some of the most purposeful and happy few weeks of my life. Life seems to be marked by these contradictions.

Sophie had a week of ups and downs but the highlight was learning she earned the role of Susan in a local theater's production of Miracle on 34th Street! She auditioned beautifully and we are so proud of her! This means, however, that her already busy schedule just got a lot busier from now until mid-December. She will have practice or rehearsal every evening and a few mornings of every day of the week.

We also got word that Maine State Music Theater is auditioning for Annie and Sophie is now preparing her video audition in hopes of earning a role for next summer!

So I have thought about how hard Sophie is working at all her activities and schooling and also just being a regular kid and I have thought about our reasons for deciding to homeschool. The core of our decision was the declaration that we could do better by her than the public school. That she would continue to learn and be "fine" in public school, but that if we as her parents made the choice, we could do better. This decision was first made while Kevin and I watched Sophie dance and perform in our driveway last April, which is a common occurrence and has been since she was little. She has been competing in figure skating since she was barely Lily's age and we have watched her accomplish so much already in her life and as we watched her we vowed to provide her with whatever opportunities she wanted in order to live the life she was passionate for. Sophie is a performer. She loves to perform. She makes people smile. She makes people feel happy. She makes us proud.

We chose to homeschool in order to allow her the opportunity to refine her natural talent and to reach for the moon! One of my favorite quotes, in fact my senior quote is: Reach for the moon, even if you miss you land among the stars!

We chose to homeschool in order to be mindful of our children and guide them through their childhood and adolescence according to our morals and ethics, with the core focus of their "education" being: Teach them how to learn, not what to learn.

We chose to homeschool in order to protect our children from overcrowded classrooms, lack of resources, mobile classrooms where Sophie had to bundle herself up (or not) to use the restroom, bullies on the playground and in the lunch-line, standardized tests where students are taught there is only one right answer to the question, and the perpetual school calendar that limits flexibility.

We chose to homeschool in order to take back some control over our lives; to not buy into the myth that public school or thousands of dollars made working hard, long hours away from our children for private school is the only option for our children; and to have the confidence to declare that we know what's best for our children without the interference of a school-board, teacher's union, state legislation, or misguided federal mandates.

We chose to homeschool because it's right for Sophie and it is right for our family. I am under no allusions that our choice is right for all families. For most, homeschooling is not a viable option however, questioning the current public school model of education is right for all families of school-age children in this country. In fact, it's right for all tax payers in this country to question the current public school model of education. What have we bought? The current model of the typical American high school is personified on television and movies from Glee to Ferris Bueler's Day Off as a mini-adult world of heartbreaks, drama, and the "big game." Students are texting, listening to ipods in class, web-chatting while their teachers lecture, walking out of class when they please, using inappropriate and disrespectful language without much consequence, selling and using drugs (mostly prescription) on school grounds, and bragging about sexual encounters as early as 7th grade. I can testify to all the above statements having worked in the public school system—actually two decent local schools with better records than most. I know that some of you reading this will just accept, which most of us have, that that's just high school. It is what it is. Kids are kids. The "social experience" is important. But think about it: America just accepts that the above cited behavior is what accounts for a normal high school social experience. It didn't used to be. Our grandparents (and some of our parents) did not have this experience in American public schools. The "American Teenager" was created after World War Two, along with mass consumer credit, insurance, and pharmaceuticals by the emergence of mass-marketing that enabled the message that in America more is better and in order to insure your "American Dream," you must buy into the system.

Think about America before 1950: what does a "teenager" look like in 1940? 1930? 1900? Now think about the typical American teenager in 1970, 1980, 1990. What does "progress" look like?

Brunswick, Maine built their first high school in the mid-twenties during the Depression. It cost the towns that would attend the school a lot of money and risk to build the large stone and brick school just off Maine Street. It was a symbol of perseverance, of not giving in, of providing a better future for their kids. It was a school to be proud of. A school to respect.

This story is true a thousand-times over throughout the country in the first half of the twentieth century. Schools were being built in parts of the country where no school bell ever rang and the pride that swelled during those decades that Americans built and opened new schools where all children (and there were terrible struggles making that a reality, especially in the south) had the right to an education. It was a grand vision and a period in American education that we should all be proud of.

Something has changed. We now accept, as a nation, the failure of so many American students in public schools without much reservation, especially when they are not our own.

We teach our children to take their education for granted.

We teach them to feel that their schools are prisons or daycares meant to keep them occupied and watched over while we all work those hard, long hours.

We teach them it is okay to disrespect their teachers—it starts with the fact that as a country we should be ashamed with the measly salaries we pay our public school teachers. And now across the country we're passing legislation mandating teachers to have masters degrees in order to be certified to teach in the public school—at the expense of the teacher in most cases. The salaries paid teachers DO NOT justify the cost of graduate degrees in this country. If we want to same standards in our teachers as doctors and lawyers and other professional of that caliber, we MUST pay them accordingly.

We teach parents to calculate their child's worth based on numbers generated by a computer reading hundreds of thousands of standardized tests created by private companies charging the federal government for every test, review, and score.

We teach parents to hand over their kids starting at age four in most parts of the country for six-plus hours of the day without much thought or consideration that there may be other options.

We chose to homeschool because there are other options.

I am in no way implying that all American schools are failures or that all parents should make the choice to homeschool. I am advocating to get involved, to question, to assert yourself as a parent of an American student. I am advocating a national change in the mindset of American education—we can ALL do better.

As to Sophie's homeschooling, I have decided to provide her some space and relief as she prepares for her new role on stage and for her next round of figure skating testing. The goal and focus of our homeschool is to do best by Sophie and for now that means to make sure she's rested, fed, secure, and learning—but with the flexibility of extending some unit lessons and completion dates. This has been a good lesson for me to learn: I am her mother and I get to decide this for her and I am her teacher and agree with her mother and slightly pause and redirect her education to for the next six weeks in order to insure her well-being.

Malnutrition increases risk of prolonged hospital stay— Hospital patients admitted with malnutrition or who don't eat for several days are at greater risk of a prolonged hospital stay, according to a study published in CMAJ (Canadian Medical... — [08:52 GMT, In: Health]

The economic despair in the air is almost palpable. Already hordes of Americans are truly and honestly hurting and things are only going to get worse.

The following are ten reasons why ordinary hard-working Americans are about to really start feeling the squeeze....

#1 Gas prices are going up again. AAA says that the average price of a gallon of regular gasoline in the United States was $2.80 on Sunday. That is 32.6 cents higher than it was during the same time period in 2009. As oil and gas prices continue to go up, that is also going to have a significant impact on utility bills for American families this winter.

#2 The price of food is poised to rise substantially. Bloomberg is reporting that the the cost of meat in the United States is going nowhere but up. But meat is not the only thing that you will soon be paying much more for at the supermarket. Wheat, corn, soybeans and almost every other major agricultural commodity is absolutely soaring this fall. As this continues, it is inevitable that ordinary Americans will seemuch higher food prices at their local grocery stores.

On a previous article, a reader named Erica left a comment in which see detailed the stunning food inflation that she is seeing where she lives....

Food inflation is real, and it is here. Just yesterday I compared my receipt from a grocery run to prices I have from the same exact store from September 15, 2009. Bacon? Up 52% to $13.69 from $8.99 for 4 lbs. Butter? Up 73% to $9.99 from $5.79 for 4 lbs. Pure vanilla extract up 14% to $6.79 from $5.95. Chopped dried onions up a mere 2% but minced garlic (wet) was up 32%.

#3 It looks like those receiving Social Security are not going to be seeing cost-of-living increases again. The Associated Press is reporting that the U.S. government is expected to announce some time this week that the tens of millions of Americans that receive Social Security will go through yet another year without an increase in their monthly benefit payments. You see, Social Security cost-of-living adjustments are tied to the official government inflation numbers, and according to the U.S. government there is basically very little inflation right now. Of course we all know that is a lie, but it is what it is.

#4 The cost of health care continues to soar into the stratosphere. Americans already pay more for health care than anyone else in the world, and yet costs continue to spiral out of control. The cost of health care increased a staggering 9.6% for all U.S. households from 2007 to 2009. Now, health insurance companies from coast to coast are announcing that they must raise health insurance premiums substantially due to the new health care law that Barack Obama and the Democrats have pushed through. So in 2011 it looks like the average American family is going to have to carve out an even bigger chunk of the budget for health care.

#5 American families could desperately use a recovery in the housing industry, but that is simply not going to happen. Foreclosure-Gate is getting worse by the day, and it threatens to bring the U.S. real estate industry to a complete and total standstill. If it is ultimately proven that the paperwork for millions of mortgages in the United States is seriously deficient, it could push hordes of mortgage lenders into bankruptcy and render mountains of mortgage-backed securities nearly worthless. Regardless, it is now going to be much more difficult to get a mortgage, much more difficult to buy a home and much more difficult to sell a home. We could very well be looking at the next stage of the housing crash. Ordinary Americans could end up losing trillions more in home equity.

#6 More Americans than ever find themselves unable to pay their bills, and an increasing number of frustrated creditors are actually resorting to wage garnishment. Yes, you read the correctly. Creditors are starting to ruthlessly go after the weekly paychecks of debtors.

After winning, creditors can secure a court order to seize part of the debtor’s paycheck or the funds in a bank account, a procedure called garnishment. No national statistics are kept, but the pay seizures are rising fast in some areas — up 121 percent in the Phoenix area since 2005, and 55 percent in the Atlanta area since 2004. In Cleveland, garnishments jumped 30 percent between 2008 and 2009 alone.

So if you are getting behind on your debt, you better watch out - your creditors may soon decide to garnish your wages.

#7 Americans now owe more on student loans than they do on credit cards. As hard as that is to believe, that is actually true. Americans now owe more than $849 billion on student loans, which is a new all-time record.

Student loan payments can be absolutely crippling to a household budget. This is especially true for young Americans that have just gotten out of school. Sadly, student loan debt is nearly impossible to get rid of. Once you are committed, it will follow you around for the rest of your life.

#8 Even as expenses rise, incomes are down from coast to coast. Median household income in the U.S. declined from $51,726 in 2008to $50,221 in 2009. There are very few areas that have not been affected. In fact, of the 52 largest metro areas in the United States, only the city of San Antonio did not see a decline in median household income during 2009.

#9 If all of this was not bad enough, now there are rumblings that the U.S. Federal Reserve is actually thinking that we need more inflation. A number of top Federal Reserve officials have come out recently and have publicly supported the notion that the Fed needs to purposely create more inflation in order to stimulate the economy. Of course what they don't tell the American people is that inflation is a hidden tax on every single dollar in our wallets and in our bank accounts. More inflation would be really bad news for ordinary Americans, because they are already having a tough time getting their dollars to stretch far enough.

#10 Apparently the U.S. government (and many state and local governments) think that this is a great time to stick it to the American people by hitting them with a slew of new taxes. There are so many tax increases scheduled to go into effect in 2011 that it is hard to keep track of them all. In fact, there are many (myself included) that are calling 2011 "the year of the tax increase". But the Americans that are going to get it the worst of all are those that are going to get hit with the Alternative Minimum Tax. One out of every six American households is going to be hit with a tax increase averaging $3,900 (thanks to the AMT) and most of them don't even know that it is coming.

Inflation is already here, but it is going to get a whole lot worse. Meanwhile, the U.S. government (along with state and local governments) is going to continue to have a voracious appetite for more revenue.

American families better get ready to tighten their belts again. There is every indication that we are all going to really start feeling the squeeze in the months ahead. The price of gas is starting to spike again. The price of food is moving north. Health insurance premium increases are being announced coast to coast and a whole slate of tax increases is scheduled to go into effect in 2011. Meanwhile, household incomes are down substantially all over the nation and the U.S. government is indicating that there will not be an increase in Social Security benefits for the upcoming year once again. So if the cost of most of the basic things in our monthly budgets is going up and our incomes are going down what does that mean? It means that average American families are about to be squeezed like nothing we have seen in decades.

The reality is that it is getting really hard to make it out there. Not only do most households have both parents working, but in many cases both parents are getting second or even third jobs. Things have gotten so bad that millions of Americans have felt forced to turn to the government for assistance just to survive.

It can be really disheartening to come to the end of the month and realize that despite your best efforts you have less money than you did at the beginning of the month. But that is where millions upon millions of American families now find themselves.

Average Americans are going to be squeezed until they have nothing left to give. Then they are going to be squeezed just a little bit more.

10/11/2010

Foreclosure-Gate

In fact, the true legacy of Foreclosure-Gate may be the massive amount of bank failures that it causes.

If you work in the mortgage industry or for a title insurer, you might not want to make any plans for the next six months. Foreclosure-Gate is about to explode. It is being alleged that many prominent mortgage lenders have been using materially flawed paperwork to evict homeowners. Apparently officials at quite a few of these firms have been signing thousands upon thousands of foreclosure documents without even looking at them. In addition, it is being alleged that much of the documentation for these mortgages that are being foreclosed upon is either "improper" or is actually "missing". As lawyers start to smell blood in the water, lawsuits challenging these foreclosures have already started springing up from coast to coast. In fact, some are already calling Foreclosure-Gate the biggest fraud in the history of the capital markets. JPMorgan Chase, Ally Bank's GMAC Mortgage and PNC Financial have all suspended foreclosures in the 23 U.S. states where foreclosures must be approved by a judge. Bank of America has actually suspended foreclosures in all 50 states. Now, law enforcement authorities from coast to coast are calling for investigations into this controversy and it could be years before this thing gets unraveled.

This thing just seems to escalate with each passing day. It is being reported that the attorneys general of up to 40 U.S. states will be working together on a joint investigation into this foreclosure crisis. Lawmakers in both houses of the U.S. Congress, including Nancy Pelosi and Christopher Dodd, have called for an investigation to begin on the national level. U.S. Attorney General Eric Holder said last week that he is looking into the issue. Things are certainly getting very serious out there. Never before has there ever been such a national focus on foreclosure paperwork.

*One Bank of America employee confessed during a Massachusetts bankruptcy case that she signed up to 8,000 foreclosure documents a month and typically did not look them over "because of the volume".

But the "robo-signing" aspect of Foreclosure-Gate is just the tip of the iceberg. Apparently there is a whole lot more going on than just a bunch of bad signatures.

Peter J. Henning, a professor at Wayne State University Law School in Detroit, was recently quoted by MSNBC as saying the following about Foreclosure-Gate....

"You've got so many potential avenues of liability. You don't even know the parameters of this yet."

The sad truth is that potentially millions of foreclosures across the United States could potentially be invalid because the securitization process has muddied the chain of ownership. In fact, an increasing number of judges from coast to coast have been ruling that the "owners" of the mortgage have no right to foreclose on a property because they lack clear title.

At the core of this title controversy is MERS - Mortgage Electronic Registration Systems. MERS is based in Reston, Virginia and it was created by the mortgage industry to enable that big financial firms to securitize and swap mortgages at high speed. MERS allowed these big financial firms to largely avoid the hassle of filling out more forms and submitting new filing fees every time that a mortgage was traded.

But now MERS is facing some very serious legal challenges. A recent article in Businessweek described the situation this way....

A lawsuit filed on September 28th in federal court in Louisville on behalf of all Kentucky homeowners claims that MERS was part of a conspiracy to create false promissory notes, affidavits, and mortgage assignments to be used in mortgage foreclosures. Similar class actions have been filed on behalf of homeowners in Florida and New York. Karmela Lejarde, a MERS spokeswoman, declined to comment on any pending litigation.

The reality is that as millions of U.S. mortgages have been bunched together and traded around the globe at lightning speed, it has become increasingly unclear who actually has title to them and who actually has the right to foreclose on these properties.

Title insurers have backed the titles of millions of these foreclosed properties and now potentially find themselves in a heap of trouble. Some of the biggest title insurers have already begun circling the wagons in an attempt at damage control. For example, one of the biggest title insurance companies in the United States, Old Republic National Title Insurance, has already declared that it will no longer write new policies for homes that have been foreclosed on by JPMorgan Chase and GMAC Mortgage.

So what happens if nearly all title insurers start avoiding foreclosed properties?

Won't that make it much more difficult for the banks to sell the massive backlog of foreclosed properties that they have accumulated?

In addition, Americans that have purchased foreclosed homes may now be facing some serious problems themselves. Millions of Americans may now "own" homes that they do not have clear title for. When it comes times to sell those homes, many Americans may find themselves unable to do so.

Needless to say, this is a complete and total mess.

Already, U.S. banks have a record number of foreclosed properties that they need to clear out, and now all of this scrutiny on foreclosure paperwork and all of these lawsuits are going to grind the process of getting these homes sold off to a standstill.

In fact, the true legacy of Foreclosure-Gate may be the massive amount of bank failures that it causes.

It would be difficult to understate how much of a nightmare Foreclosure-Gate is going to be for U.S. mortgage lenders. Having to go back through the paperwork of millions of old mortgages is going to be a complete and total disaster. If banks end up being unable to foreclose on a large number of bad mortgages, it could potentially be enough to put many banks out of commission for good. Not only that, but the legal fees that many of these banks will accumulate defending lawsuits related to Foreclosure-Gate will be astronomical.

The U.S. mortgage industry was already on the verge of death, and Foreclosure-Gate may just be the straw that broke the camel's back.

The reality is that U.S. banks are drowning in foreclosures and this current crisis is just going to make things a lot worse. Back in 2005, there were approximately 100,000 home repossessions in the United States. In 2009, there were approximately 1 million home repossessions in the U.S. and RealtyTrac is now projecting that there will be an all-time record of 1.2 million home repossessions in the United States this year.

For the U.S. mortgage industry, Foreclosure-Gate must feel like someone has dropped a bomb on them after they have already been beaten up and doused with gasoline.

Attorney Richard Kessler, who recently conducted a study that found serious errors in approximately three-fourths of court filings related to home repossessions, says that Foreclosure-Gate could haunt the U.S. mortgage industry for the next ten years....

"Defective documentation has created millions of blighted titles that will plague the nation for the next decade."

While it may be easy to beat up U.S. mortgage lenders and say that they deserve all this, let us not forget that this is going to impact a whole lot of other people too.

It is going to become much harder to get a mortgage. It is going to become much harder to buy a home. It is going to become much harder to sell a home. The U.S. housing industry is likely to suffer a significant downturn due to all of this. There is even a good chance that the entire U.S. economy could be dragged down for an extended period of time.

So no, Foreclosure-Gate is not good news for anyone.

Well, except maybe for lawyers.

But for virtually everyone else this is really bad news. Any hope that the U.S. housing industry would experience a quick recovery is completely and totally gone.

There is a yearning by tens of millions of Americans, lumped into a diffuse and fractious movement, to destroy the intellectual and scientific rigor of the Enlightenment. They seek out of ignorance and desperation to create a utopian society based on “biblical law.”

They want to transform America’s secular state into a tyrannical theocracy. These radicals, rather than the terrorists who oppose us, are the gravest threat to our open society. They have, with the backing of hundreds of millions of dollars in corporate money, gained tremendous power. They peddle pseudoscience such as “Intelligent Design” in our schools. They keep us locked into endless and futile wars of imperialism. They mount bigoted crusades against gays, immigrants, liberals and Muslims. They turn our judiciary, in the name of conservative values, over to corporations. They have transformed our liberal class into hand puppets for corporate power. And we remain meek and supine.

They want to transform America’s secular state into a tyrannical theocracy. These radicals, rather than the terrorists who oppose us, are the gravest threat to our open society.

Those who shout most loudly in defense of the ideals of the founding fathers, the sacredness of Constitution and the values of the Christian religion are those who most actively seek to subvert the principles they claim to champion.

They hold up the icons and language of traditional patriotism, the rule of law and Christian charity to demolish the belief systems that give them cultural and political legitimacy. And those who should defend these beliefs are cowed and silent.